02/19/06 06:15 am
Msg: 202763 of 202782
Providence up there with the big boys as Exxon returns
NEWSMAKER OF THE WEEK: TONY O'REILLY JNR, CHIEF EXECUTIVE, PROVIDENCE RESOURCES
Pat Boyle- Irish Independent
THE news that multinational oil giant Exxon-Mobil is to resume the search for oil in the Irish offshore after a lengthy absence propelled the small exploration group Providence Resources into the headlines this week.
Exxon-Mobil, one of the prime movers in the Irish exploration scene during the 1970s and 1980s, has agreed to drill at least two wells on the giant Dunquin prospect in the south Porcupine Basin.
The prospect is huge by any standards, bigger than anything encountered in the North Sea, and with the potential to change the energy supply picture for not only Ireland, but the rest of Europe.
The emphasis here is on potential. While Exxon-Mobil and Providence are excited by the size of the structure, it will be years before the first well goes down and only then will we know whether that potential can be realised. That said, the signs are encouraging. As Providence chief Tony O'Reilly Jnr explains, we already know the region is capable of generating significant hydrocarbons, not least because of BP's 1976 discovery of the Connemara field. As luck would have it, Connemara turned out to be a very complex fault-lined structure and despite a successful appraisal drilling programme, BP relinquished the acreage in the following decade.
Since then advances in seismic technology mean that explorers have a fair idea of the complexity of exploration targets before they drill, and seismic taken over Dunquin presents a relatively straightforward target.
Headed up by Tony O'Reilly Jnr, Providence has negotiated a deal which will leave it with a 16pc share in the Dunquin prospect after two wells have been drilled. Exxon-Mobil will hold 80pc while the other partner in venture Sosina will hold 4pc.
This may seem like a huge dilution in its holding - Providence originally held an 80pc share in the licence covering Dunquin, but given the potential of the structure, the deal still makes a lot of sense. |
